The investigations into the raw materials involve the following:
1. Checking the actual availability of oil and fats to ensure regular and stable supplies in terms of volume, value and quality.2. Extending the investigations to soda and the other raw materials which will have to be imported.
3. Taking into account the following constraints and parameters:
· In volume terms, oils and fats represent ± 2/3 of production capacity, and this necessitates the setting up of substantial logistics (modes of transport, packaging, rotation, buffer stock) which need to be analysed. The same applies to raw materials for import (particularly soda).· Oil and fats suppliers are generally few and far between, and enjoy a quasi-monopoly, which can lead to pressure on prices.
· In projects for the diversification of a press works/oil mill, investigations must study all necessary logistics for the supply of oleaginous products (coconuts, palm kernels, palm nuts) and the additional cost involved in supplying the soap factory.
Key parameters:
Outside procurement of oils and fats or captive oil production in an oil mill/soap factory (problem with internal transfer price) or upgrading of by-products (particularly soapstocks)?
Exhaustive inventory of actual quantities of coconut oil, palm oil, palm kernel oil or other fats (soapstocks) available locally.
The number and location of oil mills: production capacity, take-up of production capacity, principal activities and markets, commercial and financial results, interest in potential diversification*.
* A common mistake is to overestimate the amounts which can actually be supplied by an oil mill involved in other markets and activities.
Quality of the oils and fats: type of fat, fatty acid content, colour, odour, acidity, consistency of quality, regular analysis results.
Regularity and reliability of supply, method of transport, distance from the supplier(s), seasonal nature of any supplies.
Identification of alternative sources of oils and fats, including imports. Identification and monitoring of trends and world prices.
Identification of other suppliers of raw materials (soda) for importation:
· price, volume, reliability and packaging of the imports,
· mode of delivery, delivery lead-times and transport cost,
· customs clearance: logistics, lead-times, cost, customs tariffs.